Many years ago (on my first site) I wrote several posts on the book Work Less, Live More: The Way to Semi-Retirement
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This pre-dated FIRE becoming more mainstream (and being known by me) as the book was originally published in 2007 and I wrote about it in 2010.
At that time, the idea of semi-retirement was rather unique and somewhat “out there.” (Though undoubtedly it, or really full early retirement, was addressed in detail in Your Money or Your Life
.) It now seems kind of quaint that we thought we were living on the edge back then by suggesting people should “semi-retire”. LOL! Boy, have we come far!
I was reminded of the book when I asked millionaires what books they read. This one was on the list. I went to check it out and re-read it, but since my library lists it as a “reference” book, I can’t check it out. So I bought a copy since I really wanted to read it again.
And I’m glad I did. It brought back some great memories and made some awesome points that are even more real to me today since I’ve been living the retired life for several years now.
But I’m getting a bit a head of myself. I’ll back up and start at the beginning. I want to take you through the thinking behind semi-retirement as it represents another alternative to more-discussed forms of retirement (like taking mini-retirements).
Then I want to share some parts of the book that I found especially interesting and offer my thoughts on them. It will take me a couple posts to do this — there’s too much good stuff for a single post!
What is Semi-Retirement?
The author begins by defining what he means by “semi-retirement” (these days we all need to be specific in our definitions of various forms of retirement). His words:
Semi-retirement is reclaiming a proper balance between life and work by leaving a full-time job. By reducing spending and switching to a pared-back but more satisfying lifestyle, less money goes out the door. Tapping into accumulated savings in a sensible way provides a steady annual income.
Any shortfall can be filled with a modest amount of work, done in an entirely new state of mind: With less need to work for the largest check possible, you can find low-stress work that you truly enjoy, on a schedule that gives you time to breathe.
Basically what he’s suggesting is a step between working life and full retirement (or at least financial independence).
He’s saying that a person can save and invest to create a decent nest egg, then before they reach full financial independence, they might want to consider “semi-retiring” where they meet their needs through a combination of using asset-drawdown along with some type of work.
Think of this as an alternative to full retirement/financial independence. The advantage of semi-retirement is that you could reach it sooner than financial independence (because you need fewer assets and are still working, at least in part). The disadvantage, of course, is that you still MUST work (as opposed to financial independence/early retirement where you can choose to work or not based on your interests).
The process of getting to semi-retirement basically involves:
- Saving up a good amount of resources (so this is not really an option if you are 25)
- Cutting down your standard of living
- Quitting your job and instead doing “a modest amount of work”
- The combination of working part-time, spending little, and using a bit of savings every year then allows you to live in semi-retirement for the rest of your life
- Now you’re free to do whatever you like
It’s pretty straight-forward stuff — personal finance 101 with a retirement twist thrown in.
Looking back on my posts in 2010, here’s an alternative form of semi-retirement that I said I thought was an even better option:
- Working to grow your career/income as high as possible to maximize earnings.
- Keep spending under control so you can bank a boatload of savings.
- Slowly reduce your workload (for instance, go from working five days a week to four days a week). Granted, you’ll need to find the right position/job for this to happen — perhaps it will require a shift in jobs within your company or a company move.
- By the way, a reduction in work days will also lower some work-related costs, so you won’t take the full impact of your lost salary.
- If you’ve maximized your earnings and kept expenses low, you’ll still have plenty of surplus even working four days a week. So keep saving!
- You can spend your free time however you like — on hobbies, on travel, on developing a side business you’ve always wanted to try.
- As your savings gets larger and/or any side business you’ve developed starts growing, keep cutting days/hours devoted to your “regular” job.
- Eventually you’ll have a big enough nest egg or a good enough side business (or a combination of the two) so you can quit your “regular” job.
It’s “funny” that I wrote this and then never did anything about it. I wish I had since by then I was actually financially independent and not retiring as soon as I could was the worst money mistake of my life.
But I guess we all live and learn…
How to Fill Your Time in Semi-Retirement
One question people have over and over again is “what will I do with all that free time when I retire?”
This is a legitimate concern, of course, but I can’t help feeling a bit sorry for those who ask. Is your life really so centered around work that you literally wouldn’t know what to do without it? And even if you don’t have any outside-of-work interests today is your imagination, curiosity, and lack of adventure so limited that you can’t develop some options you’d find extremely enjoyable? If not, this is what I find to be really sad.
That said, I did offer some ideas in What to Do with Your Time in Early Retirement. Hopefully these will generate meaningful options for those wanting to retire but not knowing how they’d fill their time.
I can attest to the fact that you don’t have to have it all figured out when you retire — part of it is good enough. Plus, you’ll likely develop new interests once you retire, detox from work-life, and begin to imagine your new future.
When I retired I knew I would spend more time:
- Exercising
- With family (especially walks with my wife)
- Traveling
- Reading
- Blogging
- Playing video games
But I also knew that I would find other interests and I was open to mixing things up a bit if the opportunity presented itself.
As a result, I found a few new ways to spend my time that I really enjoy including:
- Playing pickleball. Thanks to an ESI Money reader’s suggestion I tried the sport, love it, and now play about 15 hours per week. Yes, 15 hours. 😉
- Building terrariums. I somehow discovered a YouTube video on creating terrariums and found it fascinating. I remember how I loved my small terrarium as a kid, so I decided to build my own. And that’s what I did. I started with a relatively little one and will see how it does, but I can imagine there’s a lot of future time to be dedicated to this new hobby.
- Volunteering. I am now one of the two key ushers at our church service and am really enjoying it. I’m generally more of an introvert and this “job” allows me to meet and interact with a TON of people every week — so it fills most of my social needs. That said, there is a bit more…
- Creating new friendships. I am meeting a TON of new people through pickleball. About 50 people play at the park every Monday, Wednesday, and Friday and I have gotten to know almost all of them (we sit/stand outside the courts and chat while we’re waiting our turns to play.) I have really gotten to know a few of the guys and have been invited to get together with one outside of pickleball (though I couldn’t make it). I see more guy-time happening with this group for sure.
In addition to these, there will be new things pop up now and then. If I like them better than what I’m doing now, they will replace some of the activities that take time currently. I remain flexible and open to new opportunities and I’m confident some great things will present themselves in the future.
Anyway, here’s what the book has to say about how to fill up your free time in semi-retirement:
Believe it or not, the biggest stumbling block many people have when thinking about semi-retirement is how they will fill up the free hours of the day and night.
The short answer is that if you’ve done your planning and follow a few basic strategies, this never seems to be a problem. A year or so in, you’ll be wondering how your days are slipping away. Develop and keep your list of projects and challenges posted prominently, and refer to it whenever you sense yourself needing a boost.
If you live by seizing each day as an opportunity to grow and learn, you’ll find plenty to keep you as busy as you want to be.
A few thoughts on this from me:
- The book offers its own set of ideas for what to do in semi-retirement later on and I’ll be sharing those in a future post.
- “You’ll be wondering how your days are slipping away.” Truer words were never written. My days, weeks, and months FLY by these days — but in a good way. Back when I was working, time flew as well, but it was more of a tortured blur of to-dos, bad boss interactions, almost endless meetings, and commitments to things that were often not that enjoyable. These days the balance has shifted and the like-to-dos vastly outweigh the have-to-dos, which makes the days pass very quickly.
- I find having a plan for each day to work well for me. I know when I go to bed at night what the day will look like generally. Something may come up and I might have to adjust, but most of the time the day I plan/imagine is the one that unfolds before me. I usually plan the day from the time I get up until about 3 pm. From there my wife and I free-form the rest of the day depending on what else is going on and what we’re in the mood for.
In the end, the book’s thoughts are very similar to what I’ve experience in my almost three years of retirement.
Taking a Leap of Faith
In one of the rare instances where I disagree with the book (at least in part), it suggests semi-retirement even if you don’t have all your finances in order. His thoughts:
If you are truly determined to leap into semi-retirement, even without the financial resources recommended here, then do it. In the worst case, you can cut your spending down considerably. Or after a few years of sabbatical and a chance to refocus, you can go back to full-time work.
Overall, the benefits may outweigh any inconveniences. As long as you know the right way to plan, you can decide whether and how much you want to bend the rules.
Wow. Lots to comment on here:
- Yeah, I’m not really the leap-of-faith sort of guy. I’m more like Batman — I always have a plan. So the idea of abandoning my greatest asset (my career) without a rock-solid plan to KNOW I can make it is not appealing to me. In fact, I not only want to be sure I can make it but I also want to have back-up plans in case things go south. Doing anything otherwise would create more stress in my life than working would — and would not make for a great retirement.
- That said, I also see the point in not waiting until things are so over-the-top financially that you miss out on big chunks of retirement. For example, $10 million would certainly make for a rock-solid retirement, but it’s over-kill. The time and effort it would take to get there would kill most (even if it was achievable, which it is not for most) and would deplete most of your retirement time. So enjoy those last six months of retirement you get once you reach $10 million at age 90…because that’s about all you’ll get.
- Like most things in life, there’s a balance between too much and not enough. The answer is different for everyone, but my opinion is that you don’t want too little (like retiring when you don’t have solid finances) or too much (working your whole life to reach a net worth that’s way more than you need or will ever spend.)
- It’s true that you can either 1) cut spending or 2) go back to work (or both) if things get bad. I would classify both of these as margins of safety for early retirees.
- I’m not sure which would be worse — going back to work after retiring or running a hot ice pick through one of my eyes. They would probably be equally painful. Seriously, I can’t imagine the horror I would feel if I HAD to go back to work.
- A well-thought-out plan can do most of the heavy lifting as well as protect you from many of life’s unpleasant surprises (at least financial ones). So having a great plan that you’ve invested a lot of time, effort, and planning into will go a long way in making sure any form of retirement is successful.
All this said, if I did anything wrong in retiring it was waiting too long to do it, so take what I say here with that in mind. 😉
Ok, that’s enough for this time around. I’ll continue my discussion of early semi-retirement in a future post, so stay tuned.
Going part time if your employer allows it is a great way to semi-retire. For me it’s been awesome. I get to keep my W2 benefits such as health care and work on entrepreneurial pursuits in my new free time.
Oh yeah. My wife and I are on that path right now. And if we wish, 55 is probably when we can fully retire…although paying for health care is still an unknown at this time.
I am a Managing Director for many years now. I am going towards an early retirement but it will take some more years. too many I guess. So semi-retirement looks like a great idea. Being specialized in management, leadership and not liking the consulting area, what could be other options to have a 4 days per week job, or less working hours a week?
Some ideas:
1. Cutting out a day and all those hours
2. Working the same number of hours but in four days
3. Job sharing with someone else
4. Switching roles/departments/companies to allow shorter work schedules
5. Changing careers to downshift
6. Turning a side hustle into a full-time gig (or close to it)
One other option, if you know/trust your boss, would be to talk to them and see what possible options might be.
That’s what I’m currently doing, talking to my boss about the importance of work/life balance and pitching the idea of possibly cutting back to a P/T schedule. I can easily live on half my salary with plenty to spare. He’s pretty open-minded but since he’s just a mid-level manager it would have to go higher up the chain to get approved. Anyway the seeds have been planted so I’ll continue to bring it up over the coming months and see if I can make the conversion by year end. If they go for it my goal would be to go to a 4-day, 20-hour work week (actually I’d rather do the 20 hours over 3 or even 2 days but if they’re going to approve it I’ll have to come up with a schedule that works for them too, and they’ll probably whatever has me the most available).
I did the semi-retirement thing over 10 years ago. My employer had that as an option. I went from 5 days a week to 3 days a week (Fridays and Mondays off mostly). My wife continued to work full time until I fully retired retired a few years later then she did the semi-retirement thing too. We are both retired now.
It is a great way to test drive your retirement and get an idea what retirement will be like. However, I an not sure it reduces the level of stress that much. I found myself spending a good part of Monday evenings reading and answering emails and planning for work the next day, so that Tuesdays would not be overwhelming. A little like returning from a weeks vacation every Tuesday.
Full retirement is so much better! But semi-retirement is still worth doing for a semi-experience of retirement.
There are some professions that are hard to employ semi-retirement, and I feel being a physician is one of them. If you are out of medicine for any extended period of time it really is hard to get back into the swing of things. There are so many things that change, new equipment/techniques etc. That is why in ordered to be licensed you have to keep up with continuing medical education (25 hours/yr for most) and jump other hoops for board certification.
Some docs do take sabbaticals and that is probably the same as a semi-retirement but most docs can’t really swing that because of how their practice is set up
Hard, yes.
Impossible, no.
I’m doing it.
And I’m not alone.
Semi- retirement could be attractive as it could: provide some health care coverage, keep income going to reduce the mental adjustment to drawing down assets after a lifetime of building, keep you engaged and social with the professional world (not just hanging around the house and working out with the seniors at 10am at the gym).
Semi-retirement is the way to go. It’s the best of both world especially if you’re on the young side.
That’s what I did and it worked out really well. I don’t think most people under 50 would enjoy life with no work at all. Work has a lot of intangible benefits when it’s on your own terms.
Now, I just need to convince my wife to semi-retire.
I’m glad you’re writing about this topic as it’s what my husband and I are hoping to do in the future (or some version of semi-retirement anyway). Very interesting!
I’m curious about your and others’ thoughts on reducing work hours in a higher stress, higher pay job vs making much less while working full time at a low stress “fun” job. Thoughts?
I love this blog but I’m finding, as a youngish(36) small business owner, it doesn’t relate to me as it seems everyone who comments and most of the articles are about leaving the corporate world. I had about 3 months with a fortune 500 company and quickly realized it was not for me. I have now owned multiple small business for many years and love what I do but would love learn how to transition out of what I’m doing in the next 10-12 years. I truly appreciate your willingness to be a giver as my wife and I are strong believers in doing the same but do you have any advice about a different blog that may relate to me a little more? Again, your blog is awesome, but it just doesn’t relate to me. Thank you,
troy
I like your semi-retirement idea. I believe early retirement is not appropriate for folks who are in their 20s or early 30s (folks typically in the FIRE camp) unless they have crushed it from a financial standpoint (sold a company for 10’s of millions, invested substantially in bitcoin 10 years ago, won the Powerball, etc.)
Otherwise, a better alternative might be your semi-retirement idea or a work LITE (location independence, time enjoyment/flexibility) model. Try to find work that allows you to work where you want at the times you want to work.
I’ve challenged many FIRE folks in the blogosphere who claimed to be fully retired that in reality they were actually semi-retired. This well-written discussion on semi-retirement only confirms my original beliefs.
I also agree that the “leap of faith” idea into semi-retirement is not necessarily a prudent approach. Create goals that set you up for a comfortable semi or full retirement state so that once you reach those goals you can confidently retire without having to look back or regret your decision at some point in the future.
“I’m not sure which would be worse — going back to work after retiring or running a hot ice pick through one of my eyes.”
Classic…LOL. I’m FIREd also so I get it.
One thing that FIRE blogs do not address is self-employment as a career or a permanent side hustle. Creating a work life balance is challenging when you are self employed. This article might give me some thoughts on helping to create a better work life balance. At the age of 67 I am definitely not in the FIRE movement. However, since I have been self employed from the age of 26 I have been able to position my job into do what I want when I want (with some limitations). The big problem is my business grew to a few too many employees which requires too much of my time, yet it does have the advantage that I most likely have an employee that can handle the work if I am gone for two weeks or a month. I currently take at least 5 days a month off for a mini vacation and two months of the year with a three or four week vacation. Since the age of 60 I try to limit my time at work to three to four hours at work and one to two hours off site work. The word retirement is not necessarily an option and sometimes I am bitter about having to be responsible for the company and its employees. But, It has been a great ride for the last 41 years it will be interesting to see how I do for the next 10-20 years (God willing).
Wow! This is absolutely so interesting to me right now, as I recently did exactly this, but did it by way of my own thought process…not because I had heard about it somewhere. I worked for 20 years as an Account Manager for a Fortune 100 company. I was dedicated and successful, yet always lived very frugally. In 2018, when the company had changed so much that I absolutely couldnt enjoy the job anymore, I left in January 2019. I am still off work, traveling, doing art, playing tennis, cooking amazing food, redecorating the house…I decided to pursue flexible work utilizing my bilingual skills, where i can choose my hours. The job is fun, and low stress. I am using savings when I need to, yet not touching 401K or Roth IRA so that their value has more potential to compound. I feel proud to have had the courage to give up stability and a great income, allowing myself to slow down and really enjoy life!
Semi-Retirement might also be a nice compromise when one partner is retired and the other isn’t quite ready yet. My husband retired at 58 years old in 2018 and at 56 I’m not ready to retire yet. I am self-employed and have a lot of control over my schedule so I have been moving to a part-time schedule over the past several months. The goal is to work 3 days a week, 40 weeks a year – essentially 120 days a year. This leaves plenty of time to do things with my retired husband but also allows me to continue on with work that I enjoy and earning additional income. Semi-retirement seemed like a good compromise for us.
We love the work we do, but know there may come a point where that isn’t true. We’d still want to be involved in education, and the stepdown of semi-retirement is perfect for that. There are lots of options for educators that can still pay the bills. I may step out of leadership and return to the classroom, we could pursue substitute work, interim gigs, or even working in nonprofits that serve kids directly (but typically pay badly.) That sort of semi-retirement in some form is likely for us.
I just stumbled on this post and the funny part was – I was literally thinking about semi-retirement all day at work. I wouldn’t mind working a little but our expenses are low enough that full time work isn’t really necessary. I long for the day when a majority of time during the day is spent on optional tasks. Not work items.
I went towards this route with my early retirement at age 51. I didn’t wait to have a million in the bank, but just enough. Then I retired early and often. I worked doing things I wanted to learn and do and invested all earnings. When I was done and wanted to move on I just retired again until the next opportunity that I could get excited about came my way. I will always stay open to working when it checks off all my boxes but have to admit the last couple of years of workless leisure have been great.
Great post @ESI. I haven’t heard of the book you suggested, but I’ll definitely check it out. I recently picked up the book “Work Optional” by Tanja Hester, and I thought that was a fantastic resource for semi-retirement as well. Its got some great strategies and words of wisdom. Similar to JL Collins’ chapter on F-You money. Eye opening and thought provoking stuff, challenging you to see the world through a slightly different lense 🙂
I’ve always been interested in work/life balance, and as a father to two young boys, the question I’ve posed to myself is, “Can I get some of the benefits of retirement, in order to spend more quality time with my boys, whilst still engaging in and growing my career?” Its a tough one, and something I’ve struggled with for some time.
Semi retirement seems like a great possible answer to this question. The FIRE Blogs are fantastic and I’ve learned heaps, but many talk about full financial independence and early retirement, which would be many, many years away for me. Any other resources or particular posts on semi-retirement that you’d recommend?
Thanks again for your thoughts, and keep these awesome blog posts coming!
This is a great post. Retiring completely makes you bored and semi-retirement reduces stress and helps you focus on building relationships and health.